Contracts Outline

 Contracts Outline
Prof Marks
9/2010
 
Chapter 1 Intent to Contract
 
1) The Principle of Mutual Assent
·               Mutual Assent: Agreement by both parties to a contract, usually in the form of offer and acceptance. MEETING OF THE MINDS
·         Courts ask if there has been an offer to contract and an acceptance of that offer
 
Two Types of Contracts
            1) Informal- created by mutual assent
            2) Formal- Legal proceeding contracts i.e. child support
 
*Lucy v. Zimmer- We must look to the outward expression of a person as manifesting his intention rather than to his secret an unexpressed intention. The law imputes to a person an intention corresponding to the reasonable meaning of his words and acts.
                            – The mental assent of the parties is not requisite for the formation of a contract. If the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial except when an unreasonable meaning which he attaches to his manifestations is known to the other party. Restatement 71
 
*Social Engagements are not enforceable.
 *Agreements between spouses are not enforceable unless they are commercially reasonable
*If there is an individual with a Low IQ, you must look at the individuals outward manifestations. 
 
* Stepp v. Freeman (winning lottery ticket)- To establish a contract implied in fact a plaintiff must demonstrate that the circumstances surrounding the parties’ transaction make it reasonably certain that an agreement was intended. Implied contracts show meeting of the minds through surrounding circumstances, including the conduct and declarations of the party, that make it inferable that the contract exists as a matter of tacit understanding.
 
OFFER
The offeror is the master of the offer
 
What is an offer?
A yes able proposition- A clear manifestation of a willingness to enter into a contract in such a way that the other party knows that assent is all that is necessary to cement the deal.
 
1) Definite- Terms must be specific made by the offeror
2) Communicated- Offeror makes it know to the offeree
3) Committed- Offeror intends to be bound when accepted by the offeree            
            An offer can be expressed or implied
                        Expressed- John says “I will sell you my car for $1,000.” “Ok I’ll take it” says Vicky.
Implied– John walks into a barber shop and sits down. Barber cuts John’s hair and John pays him.
A) Preliminary Negotiations
* Leeds v. First Allied Connecticut Corp (Preliminary Negotiations) – When the parties have intended to bind themselves, it will be considered a contract. Look at all the facts and circumstances) and how detailed) to see whether the parties intended to bind themselves.
– Determines intention- by overt acts and statements of the parties
1)    Agreements
2)    Course and substance of negotiations
3)    Prior dealings with parties
4)    Customs/practices in their trade
*Thus, objective theory of contract (unexpressed, subjective intention is irrelevant).
 
B) Statement of Opinion or Intention
            If language like guarantee, warranty, promise, etc. are used it will be considered a breach of contract if one does not fully perform. (Dentist Example)
 
C) Solicitations
*Advertisements are not offers. They are considered mere invitations to make an offer.   The reason they are not offers is because they are not definite enough (yes-able) and there are too many people who could accept if it was considered an offer. 
*Except- Lefkowitz v. Greater Minneapolis
If an advertisement is definite enough and there is limited power of acceptance it will be considered an offer.
*Rewards are usually unilateral offers. This means that they are offered and can be accepted by performing. If there is an expiration date in the ad, that is when the offer will expire. If there is no expiration date, the offer expires after a reasonable time, What if the offeree did not know of the reward? If it is the government posting the award, the offeree will still get the award. If it is a private person posting the reward, they will not.
 
Case: Loring v. City of Bostonà D caught and convicted felon of arson 4 years after government reward posting. Expired because it was not a reasonable amount of time.
 
D) Written Contract to Follow
 Continental Laboratories v. Scott Co.
                        1) Whether the contract is of a class usually found to be in writing
2) Whether it is of a type needing a formal writing for its full expression
3) Whether is has few or many details
4) whether the amount is large or small
5) whether the contract is common or unusual
6) Whether all the details have been agreed upon or some remain unresolved
7) whether the negotiations shows a writing was discussed or contemplated
            *Statute of Frauds must be in writing
 
2) ACCEPTANCE
What a reasonable person would think is acceptance, within a reasonable time. Acceptance is a manifestation of assent to the terms made by the offeror in a manner invited or required by the offeror.
 
1) Responsive to the offer in a manner invited or required by offeror
2) Absolute and unequivocal (you are not going back to bargaining) commitment through assenting to the terms made by the offer            3) Communicated- manifest the assent
 
Mail Box Rule:
–       If the offeree accepts by mail (if reasonable), his acceptance will be valid the day it is sent out in the mail, not when the offeror receives it. The envelope must be properly addressed and posted. This only applies to acceptance.
Case: Morrison v. Thoelke à Mailed acceptance before heard about revocation of the offer. It is a contract
 
Would a reasonable person in the Offeror’s position believe there was accepta